Finger Lakes Zero Waste Coal. v. EPA

16-3420-ag
Finger Lakes Zero Waste Coal. v. EPA
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, at 40 Foley Square, in the City of New
York, on the 15th day of May, two thousand eighteen.
PRESENT: GERARD E. LYNCH,
CHRISTOPHER F. DRONEY,
Circuit Judges,
WILLIAM K. SESSIONS III,
District Judge*
________________________________________________
FINGER LAKES ZERO WASTE COALITION, INC.,
Petitioner,
v. No. 16-3420-ag
UNITED STATES ENVIRONMENTAL PROTECTION
AGENCY, SCOTT PRUITT, ADMINISTRATOR,
UNITED STATES ENVIRONMENTAL PROTECTION
AGENCY,
Respondents.**
________________________________________________
*
Judge William K. Sessions III, of the United States District Court for the District of Vermont, sitting by
designation.
**
In accordance with Fed. R. App. P. 43(c)(2), the Clerk of Court is directed to amend the caption as set
forth above.
FOR PETITIONER: Gary A. Abraham, Law Office of Gary A.
Abraham, Great Valley, NY.
FOR RESPONDENT: Heather E. Gange, Environmental & Natural
Resources Division, U.S. Department of Justice
(Jeffrey H. Wood, Acting Assistant Attorney
General, Environmental & Natural Resources
Division, U.S. Department of Justice, Zach
Pilchen, Michael Lee, Office of General
Counsel, Environmental Protection Agency, on
the brief), Washington, D.C.
Petition for Review of a July 29, 2016, order of the Administrator of the
Environmental Protection Agency.
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the petition for review is DENIED.
Petitioner Finger Lakes Zero Waste Coalition, Inc. (“the Coalition”) petitions for
review of an order of the Environmental Protection Agency (EPA) Administrator denying
the Coalition’s request that the EPA reopen or object to a permit issued by the State of New
York for a facility burning gas from a nearby landfill in Ontario County, New York. We
assume the parties’ familiarity with the underlying facts, the procedural history of the case,
and the issues presented in the petition for review, which we discuss as relevant here.
I. Statutory Framework
Title V of the Clean Air Act (“CAA”), which Congress added to the CAA in 1990,
“requires major stationary sources of air pollution to receive operating permits
incorporating CAA requirements and establishes a procedure for federal authorization of
state-run Title V permitting programs.” N.Y. Pub. Interest Research Grp. v. Whitman, 321
F.3d 316, 320 (2d Cir. 2003) (“NYPIRG”); see also 42 U.S.C. §§ 76617661f. Following
2
the passage of Title V, the state of New York established such a state program through its
Department of Environmental Conservation (DEC). The EPA gave the program final
approval in 2001. See NYPIRG, 321 F.3d at 32022. Pursuant to the program, the DEC
may grant Title V permits to major stationary sources of air pollution. See 42 U.S.C. §
7661a; NYPIRG, 321 F.3d at 320.
As part of the permitting process, DEC must offer an “opportunity for public
comment” on a permit application. See 42 U.S.C. § 7661a(b)(6); NYPIRG, 321 F.3d at 323.
Once the DEC responds to public comments and decides to issue the permit, it “must give
the EPA 45 days to review and to object to a permit that does not meet the requirements of
Title V.” NYPIRG, 321 F.3d at 323 (citing 42 U.S.C. § 7661d(b)(1); 40 C.F.R. § 70.8(c)).
If the EPA does not object, then “any person may petition the Administrator within 60 days
after the expiration of the Administrator’s 45-day review period to make such objection.”
40 C.F.R. § 70.8(d). The Administrator must then review the petition within 60 days and
object if the petitioner “demonstrates” a permit applicant’s noncompliance with CAA
requirements. NYPIRG, 321 F.3d at 333; 42 U.S.C. § 7661d(b)(2).
The EPA Administrator may also reopen a state-issued Title V permit for cause
where the EPA discovers, or a petitioner demonstrates, that one of four requirements for
re-opening is satisfied. See 42 U.S.C. § 7661d(e); 40 C.F.R. § 70.7(f)(1) (listing
requirements for EPA to reopen a Title V permit). If the Administrator denies either a
petition to object or a petition to reopen, the petitioner may appeal this final agency action
to the appropriate U.S. Circuit Court of Appeals. See 42 U.S.C. 7607(b)(1).
3
As the EPA explains, state permitting authorities considering a permit application
must decide whether to treat certain stationary sources of air pollution as a single source of
pollution or as separate sources. This decision has “real-world consequences” because “[i]f
two facilities are part of the same sources, and their combined emissions exceed certain
thresholds, they are considered a ‘major source’ . . . of air pollutants,” which results in
“more stringent [CAA] controls.” Respondents’ Br. at 8. To make this determination, state
permitting authorities must examine whether “any group of stationary sources . . . are [1]
located on one or more continuous or adjacent properties, . . . [2] are under common control
. . . , [and] [3] belong[] to a single major industrial grouping.” 40 C.F.R. § 70.2 (defining
“major source”).
At issue in this case is the “common control” requirement. While New York state
law does not define this requirement, the DEC applies its Declaratory Ruling 19-19 to
analyze the common control question. This ruling explains that the DEC will determine
common control on a “case-by-case basis,” guided by “EPA’s informal guidance
documents and determination letters” without being bound by those same letters or any test
or factor. App. 178.
II. Factual Background
This case began in 2011, when Seneca Energy II, LLC (“Seneca Energy”), applied
to DEC to renew and modify its Title V permit. Seneca Energy operates a “landfill gas-to-
energy” facility (“the facility”) in Ontario County, New York. App. 85. The facility obtains
its gas from a landfill on the same or adjacent property owned by Ontario County and
leased and operated by Casella Waste Systems of Ontario, LLC. During the public
4
comment portion of the permitting process, the Coalition submitted the only public input
regarding Seneca Energy’s application.
In its comments, the Coalition sought to demonstrate that the facility and the
adjacent landfill are under “common control” for purposes of the major source analysis. In
response, the DEC issued an 11-page “Responsiveness Summary” addressing the various
issues that the Coalition raised and reaffirming that the facility and landfill are not under
common control. DEC then submitted the proposed permit to the EPA for review, and the
EPA did not object within the 45-day time limit. As permitted by 40 C.F.R. § 70.8(d), the
Coalition petitioned the EPA on December 22, 2012, to object to the permit on the ground
that the facility and landfill are under common control.
The EPA did not respond to the petition until June 29, 2015. The 2015 EPA Order
determined that the DEC had inadequately addressed the Coalition’s concerns in its
Responsiveness Summary, because that summary “did not affirmatively identify or explain
the facts and factors upon which it based its determination that the facilities are not under
common control.” App. 99. Instead, the “DEC merely provided targeted rebuttals to some
of the facts presented by the commenter.” App. 100. The EPA then directed the DEC “to
explain, on the record, what case-specific facts and factors [DEC] considered as part of its
source determination analysis regarding the two facilities” in order to “provide an adequate
record sufficient to support a source determination.” App. 10001.
The DEC responded to the 2015 EPA Order on October 26, 2015, with a “Source
Determination” explanation. The 2015 Source Determination provided additional
background details on the facility and the landfill, the statutory and legal framework, and
5
analysis of other “major source” criteria. That information was not included in the original
2012 Responsiveness Summary that the DEC issued. The DEC then applied numerous
factors from Declaratory Ruling 19-19, concluding that each factor weighed against finding
common control. As part of this analysis, the DEC (1) included additional reasoning
regarding the sharing of tax credits by the facility and the landfill to justify its common
control conclusion that the previous Responsive Summary did not address, and (2) noted
that the source determination was consistent with prior determinations in New York,
another factor that the Responsiveness Summary did not discuss.
On February 8, 2016, 105 days after the DEC Source Determination, the Coalition
filed a petition styled as a request to reopen the facility’s Title V permit. Although styled a
request to reopen, the petition noted the EPA’s 45-day timeframe to object to a permit and
the 60-day timeframe that outside parties have to petition to the EPA for an objection after
those initial 45 days. Using this timeframe, the Coalition stated that it had timely filed
within the 60-day timeframe, even though that timeframe is for a petition to object, and not
for a petition to reopen. As to its substance, the petition incorporated the Coalition’s 2012
petition to object by reference and noted a few facts from that petition to conclude that the
facility and the landfill are under common control. The Coalition also argued that the
DEC’s 2015 Source Determination did not respond to the 2015 EPA Order and applied the
wrong legal analysis.
The EPA Administrator denied the Coalition’s petition on July 29, 2016, both as a
petition to object and as a petition to reopen. As to the petition to reopen, the Administrator
primarily concluded that the Coalition did not address the reopening criteria under 40
6
C.F.R. § 70.7(f)(1) and did not engage the 2015 Source Determination. Insofar as the
Coalition’s submission was a petition to object, the Administrator denied the petition for
similar reasons. The Coalition now appeals.
III. Review of the Petition
We review the denial of a Title V petition to object or reopen pursuant to the
standards for judicial review set forth in the Administrative Procedure Act. NYPIRG, 321
F.3d at 324 (citing 5 U.S.C. § 706). “Under the APA, we must set aside any agency action
that is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.’” Id. (quoting 5 U.S.C. § 706(2)(A)); see also Alaska Dep’t of Envtl. Conservation v.
EPA, 540 U.S. 461, 49697 (2004) (reviewing EPA order regarding state environmental
agency’s decision under arbitrary and capricious standard of 5 U.S.C. § 706(2)(A)). “[I]n
deciding whether agency action is arbitrary and capricious, a court considers whether the
agency relied on factors which Congress has not intended it to consider, entirely failed to
consider an important aspect of the problem, offered an explanation for its decision that
runs counter to the evidence before the agency, or is so implausible that it could not be
ascribed to a difference in view or the product of agency expertise.” Islander E. Pipeline
Co. v McCarthy, 525 F.3d 141, 15051 (2d Cir. 2008) (internal quotation marks omitted).
We conclude that the EPA Administrator did not act arbitrarily or capriciously by
denying the Coalition’s petition to reopen or object to the Title V permit. It was not
arbitrary or capricious for the Administrator to deny a petition to reopen where that petition
did not mention the relevant legal framework for reopening a case, much less explain why
the petitioner is entitled to the relief that it seeks under that framework. See 40 C.F.R. §
7
70.7(f)(1) (outlining standard for reopening a Title V permit). Similarly, insofar as the
Coalition’s petition requested that the EPA object to the permit, the Coalition did not
respond to or engage the 2015 Source Determination. As a result, the petition was plainly
inadequate under the relevant statutory framework. See 42 U.S.C. § 7661d(b)(2) (requiring
petitioner to “identify all . . . objections” to the Title V permit); see also id. (requiring
petitioner to “demonstrate[] to the Administrator that the permit is not in compliance with
the [CAA’s] requirements”); MacClarence v. EPA, 596 F.3d 1123, 113033 (9th Cir.
2010) (affirming denial of petition to object where petition did not adequately address state
agency decision regarding the aggregation of polluting facilities).
In contrast to the Coalition’s petition, the 2015 DEC Source Determination set forth
the applicable statutory framework and common source explanation in significant detail.
The DEC submitted a detailed memo accompanied by many exhibits to support the
common control conclusion that it reached. Further, the 2015 Source Determination
included additional analysis regarding the tax credits that the facility and landfill shared
and pointed to precedent to justify the common source conclusion. Given the DEC’s
detailed response to the 2015 EPA Order and the Coalition’s failure to address that
response, the EPA’s 2016 Order provided a non-arbitrary and reasonable ground to deny
the petition.
We also reject the Coalition’s argument that the 2016 EPA Order was arbitrary and
capricious because the agency requested a more thorough common control explanation in
2015, but then denied the Coalition’s petition in 2016. First, as we have already explained,
the Coalition’s petition did not engage with the 2015 Source Determination. Second, as we
8
discussed above, the 2015 Source Determination provided a much more thorough
explanation for the common control decision. Accordingly, the Administrator’s differing
responses to the two DEC’s explanations from 2012 and 2015 did not constitute arbitrary
or capricious agency action.
We have considered the Coalition’s remaining arguments and find them without
merit. Accordingly, we DENY the petition for review of the EPA’s order.
FOR THE COURT:
Catherine O=Hagan Wolfe, Clerk of Court
9